1. Setting the Stage for Federal Action on Medicaid Reform June 6, 2006
Debbie I. Chang , Senior Vice President
Nemours Foundation and Executive Director
Nemours Health and Prevention Services

2. Medicaid Is a Key Payer of a Wide Range of
Services
Sources: “Medicaid and the Uninsured, Medicaid Spending Growth” Vernon Smith e. al, Kaiser; “Health Spending and Future of Medicaid,” remarks Alan Weil, sponsor Health Affairs; and AARP Beyond 50, 2003 from GAO.

3. Elderly and People with Disabilities Account for 70% of Medicaid Spending
Total = 55 million people
Total = $234 billion
*Total expenditures exclude administrative expenses, vaccines for children, DSH, and other provider payments.
Source: Kaiser Foundation, “The Medicaid Program at a Glance” Fact Sheet, 2006.

4. 4 Out of 10 Medicaid Dollars are Spent on Medicare Beneficiaries
Total Medicaid Expenditures = $267 billion
“Dual” Eligibles
40%
Source: Urban Institute estimates based on data from the Medicaid Statistical Information System (MSIS) and Medicaid
Financial Management Reports prepared for the Kaiser Commission on Medicaid and the Uninsured, Cindy Mann

5. “A perfection of means, and confusion of aims, seems to be our main problem.”
Albert Einstein

6. Sources of Growth in Federal Medicaid Expenditures, 2001-2002
$9.0 billion
38%
$2.3 billion
$2.1 billion
48%
57%
62%
43%
52%
$15.7 Billion Increase
Source: Kaiser Foundation, “The Medicaid Program at a Glance” Fact Sheet, 2003

7. Medicaid Expenditures by Eligibility Group and Type of Service, 1998
Optional Services
for Groups States
Are Required
to Cover
21%
Mandatory Services for
Groups States Are
Required to Cover
35%
Optional
Expenditures
65%
All Services for
Optional Groups
44%
Total = $154 billion
NOTE: Expenditures do not include DSH payments, administrative costs, or accounting adjustments.
Source: Urban Institute estimates, based on data from Federal fiscal year 1998 HCFA 2082 and HCFA-64 reports, 2001.

8. States have Pursued Many Reforms
Cost-Sharing Increases: Impose premiums or non-nominal cost-sharing for services
Preferred Drug Lists & Supplemental Rebates: Shift beneficiaries to lower-cost drugs and negotiate additional rebates from manufacturers
Multi-State Purchasing Pools: Increase state negotiating leverage by collectively purchasing prescription drugs
Limited Benefits and Benchmark Plans: Provide slimmer or enhanced benefits to targeted populations
Premium Assistance: Medicaid pays premiums for beneficiaries to enroll in ESI
Coverage Expansions: Provide Medicaid coverage for expansion populations (e.g. childless adults)
LTC Integration Projects & HCBS: Improve coordination of care for dual eligible beneficiaries and Medicaid beneficiaries receiving LTC services
Medicaid Managed Care: Provide some or all Medicaid services through capitated MCOs
Chiquita White, Senior Manager, Avalere Health, LLC, June 4th